MENACING FINANCE : BEWARE OF FAKE GOODS AND SERVICES TAX REFUND CLAIMS

1. INTRODUCTION

The Goods and Services Tax Network, a non-profit and a non governmental organization has publish a news regarding counterfeit message being circulated among the Goods and Services Taxpayer about Goods and Services Tax Refund. Such defraud message is being circulated to receive bank and personal information of the Goods and Services Taxpayers by miscreants to utilise them for malice activities.

2. OVERVIEW OF GOODS AND SERVICES TAX NETWORK

It is a non profit and non governmental organization which is concerned regarding the implementation and administration of Tax in the country . It is the technological backbone of levying taxes in the country . The main Functions of the Goods and Services Tax Network are:

• Registration of the Goods and Services Taxpayers by the online portal
• It help in filling GST returns and also help in aligning sales and purchases
• It help in filling GST returns and also help in reporting sales , purchases and tax liabilities
• It matches the details of buyer and seller to avoid tax evasion It facilitate online payment of Goods a Services Tax for the taxpayers
• It has robust cybersecurity to protect the confidentiality and vital information of the Taxpayer
• It disseminates vital information to authorities, taxpayers and other stakeholders for accountability and transparency [1]

3. CONCEPT OF GOODS AND SERVICES TAX REFUND

GST refund refers to the process by which a taxpayer can claim a return of the Goods and Services Tax (GST) paid on inputs or input services used in the course of business activities. In the GST system, businesses can get refund in their input activities. The refund process is designed to prevent the cascading effect of taxes and ensures that businesses are not burdened with paying tax on the same input multiple times.

4. EXPANSION OF COMMINATION ON FAKE MESSAGES REGARDING GST REFUND

The gang of miscreants are finding a way to swipe through the taxpayers personal and bank details which causes a threat to their financial and personal security. The gravity of such false message are so high that GSTN had become very much vigilant regarding the risk.

5. IDENTIFICATION OF FAKE MESSAGES

The GSTN has released guidelines regarding the distinction between authentic and fake Goods and Services Tax Refund message to prevent the Taxpayer fall prey to the fraudsters. It is as following:

• Verification of GSTIN Numbers of Goods Supplier.All registered sellers and goods suppliers have a unique 15-digit GSTIN, comprising a combination of state code, PAN number, and unique registration number
• Cross Check the GST Invoice Number. Fake GST bill may be identified easily by any disparity in the invoice number or date
• Check the Status of Tax Payment by Supplier. Go to the GST portals and check in the GST return section. If the tax is paid, the GST invoice is legit.
• Verify the Signature of Supplier in case of doubt please reach the GST authorities
• Verify HSN or SAC Codes of Goods Services. All goods and services are provided with unique Harmonized System of Nomenclature (HSN) and Services Accounting Code (SAC) respectively. The HSN and SAC code should be mentioned correctly on each GST invoice. In case of any discrepancy, you can verify these codes on the GST portal
• There are certain website links which has been blacklisted and published by the GSTN beware of such link or websites[2]

6. SECURE COMMUNICATION CHANNEL

The Goods and Services Tax Network (GSTN) typically employs secure communication channels, such as encrypted connections, to ensure the confidentiality and integrity of sensitive tax-related information exchanged between taxpayers and the GSTN platform. This helps in safeguarding data during transactions and communications related to the Goods and Services Tax (GST). There must be secure portal or email ID for communication.

7. CYBERSECURITY MEASURES UNDERTAKEN BY GSTN

• Encryption allows to prevent misuse of information by building Communication channels
• Access control over the sensitive information by the authoritized personnel
• Multi-Factor Authentication (MFA) enables add protection by adding multi process of authentication
• Implementation and development of Incident Plan to prevent breach of security and swift action to be taken
• Strict security monitoring to prevent malafide activities before it is executed to prevent financial fraud
• Stable backup is important to revive critical information in case of data loss or malware

8. ELIGIBILITY OF GOODS AND SERVICES TAX REFUND

• Tax paid on inward supply of goods and/or services which have been exported or on inputs or input services used in goods and/or services exported
• Unutilized input tax credit due to output supplies being exports or zero rated supplies
• Unutilized input tax credit due to inverted duty structure.
• The business who does export of business and services including supplies to Special Economic Zone.[3]

9. APPLICATION FOR GOODS AND SERVICES TAX REFUND

• To claim a GST refund, a taxpayer needs to file a refund application on the GST portal.
• The tax authorities verify the refund application and the accompanying documents. After the verification the amount is deposited into the taxpayers bank account
• The money is refunded within the stipulated time by the authorities in the bank account of the taxpayer
• Refunds can be granted through the electronic credit ledger, and payment advice by the authorities
• Application with proper documentation is important to prevent discrepancies

10. PRECAUTIONS

• Verification of Sender information such as contact details is very important to avoid such fraud
• Educating taxpayers by campaign and Advertisements about GST refund fraud
• Avoid clicking on link or any attachments present in the message as the official message dont contain such link or attachment
• Cross-verify any transaction or refund details mentioned in the message with your own records . Official communications will not ask for sensitive information like passwords or bank details via messages.
• Regularly check official announcements and updates from GSTN through authorized communication channels
• Enable and use two-factor authentication for GST portal access to enhance security.
• Seek advice from tax professionals or consultants if you are unsure about the legitimacy of a message.
• On receiving a message that seems suspicious, report it to the GST authorities immediately. Reporting fraudulent messages helps the authorities take swift action against potential
• Take into account the fraudulent link or websites and prevent falling prey to such fraudulent message and protect the finance

11. CONCLUSION

Wealth and Assets are hard earned attributes of a person and losing them to such fraudulent messages alert .The Cybersecurity System is to regulate such offence as tax is important form of revenue for smooth functioning of governmental activities and economic growth .Such fraudulent message has increased during COVID pandemic as people have lost jobs and are finding evil alternative to rob wealth and personal information from other people.GST refund fraudulent message are threat to the financial system of the country. It requires to be combat with robust cybersecurity , existence and implementation of strict Penal law for such deceitful act. Therefore GSTN Alert has safeguarded the financial interest and protection of taxpayer from such fraud by making them aware and vigilant along with reporting such fraudulent message to the Income Tax department or GSTN portal to prevent circulation of fraudulent messages and the culprit being penalized for their crimes.

GST is a much needed restart button for economy but its refund message is a ringer's button

12. CITATIONS

1.GROWW, " GSTN" available at https://groww.in/p/tax/gstn (last visited on January 10, 2024)

2. MINT, " Income Tax Issues Warning Against Fake SMS " available at https://www.livemint.com/money/personal-finance/income-tax-department-issues-warning-against-this-fake-sms-1568786376579.html (last visited on January 10, 2024)

3. ANNAPOORNA,"GST Refund : Step by Step Guide to GST Refund Claims" available at https://cleartax.in/s/refund-process-under-gst (last visited on January 10, 2024)